German start-up seizes home electrification opportunity in Australian takeover bid

Three months ago, engineer and “electrify everything” campaigner Saul Griffith was doing his thing at the Australian Clean Energy Summit, explaining in well-honed detail the tens of thousands of dollars consumers can save on energy by ditching gas in the home and petrol in the car and going all-electric and efficient.

But this time, Griffith had a new and “fairly radical point” to make, this time directed at the clean energy industry:

“This is an extraordinary business opportunity,” he told the Summit. “To take your increasingly marginal rooftop solar and battery business and extend it into electrifying the whole household.”

This week, a European conglomerate has dived into the Australian market to seize this very opportunity, with plans to spend $100 million in Australia and its Asia Pacific neighbours buying up stakes in a series of those very same “increasingly marginal” rooftop solar and battery businesses Griffiths was talking about.

1komma5° and the CO2 neutral life

The conglomerate includes Porsche Ventures, a founder of Tesla’s European operations, and the co-founder of German battery giant Sonnen, Christoph Ostermann. Its pet project is the German company 1komma5°, which has been on a global buying spree that has seen it buy into 16 companies in the last 10 months to bring “CO2-neutral life” to homes and small businesses.

In Australia, the 1komma5° journey starts with a controlling stake in the NSW-based solar and battery retailer and installer, Natural Solar, announced four days ago.

In a LinkedIn post on the weekend, 1komma5° global CEO Philipp Schröder – the former country director of Tesla in Germany and Austria – hailed the move into in Australia as giving the company a foothold in “the third largest solar and battery market globally.”

A finger on the electrification pulse

The core differentiating technology of 1komma5° is the Heartbeat, a home energy management system that connects batteries, heat pumps and air conditioners, electric vehicle chargers, smart meters, and manages the buying and selling of electricity from and to the grid.

Natural Solar founder and 1komma5°’s new APAC chief Chris Williams says the need for a one-stop-shop for all things electric in the home is now driven by consumer demand and the evolution of various products in the home.

“We have different things happening concurrently. The race to EV uptake, which is triggering higher demand for EV chargers and higher electricity bills, the natural growth of solar on the back of skyrocketing electricity prices, and then the growth of the battery storage market,” Williams told RenewEconomy on Tuesday.

“In addition you’ve got heat pumps, you’ve got smart home automation and smart appliances like air conditioning in the home.

“There’s so many products and a lack of one-stop-shops that have the ability and the capital to bring those all under one umbrella.”

This all gels with what Griffith was saying, back in July, about the “extraordinary business opportunity” up for grabs in home and business electrification – and the coordination and financing of that

“If you can figure out how to convert to this lifetime cost, sort of finance package that helps you buy the right appliance,” Griffith told the Summit.

“You gotta buy the heat pump water heater, it’s $1,000 or $2,000 more expensive than the gas water heater. You’ve got to buy the electric induction stove, which is $500 to $2,000 more expensive than the gas.

“So how are we going to get those [households] least able to meet those capital requirements… in Australia to invest?”

Delivering a vision

Like Griffith, these European energy big hitters have seen the opportunity and are racing, via 1komma5°, to buy up as many solar and batter and home energy management companies around the world as possible.

It is banking on the benefits of economies of scale; larger procurement abilities, greater access to products and technologies, operational efficiencies, and being able to point to how its products are used in other countries as demonstrative selling points for consumers in new locations.

Williams says 1komma5° wants to have 80 deals done around the world within the next 18 months.

When asked about the risk of such a high speed acquisition strategy, Williams said the big names behind the organisation and the amount of capital give them credibility.

“The key element here is being backed by someone like Porsche Ventures, it’s a serious outfit. These guys aren’t messing around, it has huge backing and ability to deliver the product,” he said.

“I have absolute confidence to deliver on the vision.”